The court emphasized that in cases where the contract is terminable, the issues of legality of termination and entitlement to damages are to be determined by the Arbitrator.

JUDGMENT :

ASHA MENON, J.

1. This appeal has been preferred by the appellant being aggrieved by a judgment dated 13.01.2020, passed by the learned Single Judge dismissing O.M.P.(I) (COMM.) 273/2019, filed by it under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’).

2. It is not disputed that the appellant/M/s.Inter Ads Exhibition Pvt. Ltd. and the respondent/Busworld International Cooperatieve Vennootschap Met Beperkte Anasprakelijkheid had entered into a Joint Venture Agreement dated 16.10.2003 (for short, ‘JVA-I’), for organizing in India, exhibitions and conferences known as “Busworld India”. A Supplementary Agreement dated 24.07.2009, was also entered into between the parties. Pursuant to these agreements, three editions of such events were organized in the years 2005, 2007 and 2009. After executing another Joint Venture Agreement (for short, ‘JVA-II’) on 25.10.2011, events were organized in the years 2011, 2013, 2015, 2016 and 2018. According to the appellant, all these editions were organized successfully on account of their hard-work and dedication. Importantly, the respondent had made no investment even by way of working capital for the organisation of these events. However, for the ‘2018 Event’ organized at Bengaluru, the respondent had, for the first time, agreed to pay Euro 67,000 towards the working capital of the event in terms of Article 5.2(b) of JVA-II. A Memorandum of Understanding was also executed between the parties on 21.10.2017, whereby the respondent agreed to set off its dues, which it was to claim from the appellant for the earlier editions, against the said contribution to the working capital for the 2018 event.

3. As per the appellant, admittedly, it had to reimburse Euro 55,949.28 towards expenses on marketing, research, advertisement, etc., borne by the respondent for the earlier editions. The appellant further undertook to pay to the respondent, Euro 67,000 a week before August, 2018, i.e. between 29.08.2019 and 31.08.2019, but it informed the respondent vide email dated 20.08.2018, that it would pay the said amount in three instalments, one each in the months of September, October and November, 2018, respectively. Two instalments were duly paid by the appellant, but it was unable to pay the third one due to certain constraints and offered to compensate the respondent by paying interest @12% per annum, on the delayed payment, which was agreed to by the respondent.

4. The dispute apparently arose between the parties when on successful completion of the ‘2018 Event’, the ‘2020 edition’ was announced by the respondent on 04.09.2018, but it failed to respond to the e-mails dated 12.10.2018 and 17.10.2018 sent by the appellant for venue booking, etc.. Subsequently, the appellant received a communication/notice dated 15.03.2019 from the respondent stating inter alia that the JVA-II stood terminated and also making a claim for payment of Euro 118,486,34. This according to the appellant, was despite the fact that 10 days prior thereto, vide e-mail dated 05.03.2019, the respondent had agreed to receive the last instalment with interest. The appellant protested and pointed out that after so many years of valued partnership, JVA-II ought not to be terminated on account of a minor default.

5. In the light of the disputes arising between the parties out of JVA-II and since it contained an arbitration clause, the appellant filed a petition under Section 9 of the Act, seeking the following reliefs: -

“a) the termination notice dated 15.03.2019 issued against the terms of JVA-II, be quashed and set-aside;

(b) pass ex-parte ad interim order(s) restraining the Respondent to give effect to the termination notice dated 15.03.2019…”

6. After hearing both sides, the learned Single Judge concluded that in the light of Article 7.3 of JVA-I, the contract between the parties was determinable in nature as it enabled either of the parties to terminate the agreement if the other party wa